The uncertainty regarding the government’s package weighed again on the financial market this Friday (8), while a meeting on the topic brought together President Luiz Inácio Lula da Silva (PT) and ministers from the affected areas in Brasília.
At around 3:30 pm, Ibovespa – the stock exchange’s share index, B3 – registered a drop of more than 2%, quoted at 127,215 points. The dollar rose 1.87%, sold at R$5.77.
Since the beginning of the week, the market has been waiting for the government to hammer out measures to balance public accounts and give credibility to the fiscal framework.
Following the results of the election in the United States and the victory of Republican Donald Trump to the White House, on Wednesday (6), the dollar – which had reached its second historic high (R$ 5.89) in the previous week – reached retreat.
But it rose again this Thursday (7), after the statement by the Minister of Finance, Fernando Haddad, that the announcement of the adjustment package would only come next week.
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The package faces resistance from social sector departments. At least they have already taken a stance against the cuts, which could reach R$50 billion, according to market estimates.
One of the alternatives on the negotiation table is a “redesign” of the salary bonus, paid once a year to formal workers who receive up to two minimum wages.
The benefit will cost R$30.7 billion in 2025 and should be more concentrated on the poorest. Under the current rule, an increasing number of people have benefited from the bonus, driven by the policy of increasing the minimum wage.
The policy of appreciation above inflation, however, will be maintained for salaries. The practice causes a sharp increase in other related expenses, such as retirement, pensions, unemployment insurance and Continuous Payment Benefit (BPC).
Among the proposals on the negotiating table is the de-indexation of these benefits from the minimum salary.
Minister of Social Development, ruled out changes to Bolsa Família and the Continuous Payment Benefit (BPC). Luiz Marinho, from the Labor and Employment department, criticized the possible reduction in unemployment insurance, and the Minister of Social Security, Carlos Lupi, threatened to resign if the department had cuts.
Health and education may be affected
The economic team also suggests making the rule that provides for constitutional health and education minimums more flexible. With the end of the spending cap, these expenses – which had been adjusted for inflation – were once again linked to percentages of revenue.
Nísia Trindade, from Health, and Camilo Santana, from Education, also resist possible changes in the constitutional floors of their areas.
The government’s measures must be consolidated in two proposed amendments to the Constitution (PECs), since several public policies are determined by the Magna Carta, such as the salary bonus, the Basic Education Maintenance and Development Fund and the Valorization of Education Professionals (Fundeb), in addition to spending allocations.
The government leader in Congress, senator (PT-AP), stated this Friday (8) that the public spending cut package to comply with the rules of the fiscal framework will not affect the “acquired rights” of Brazilians.
“The necessary margin that the economic team is requesting to comply with the fiscal framework, the zero deficit target, and the support of what was approved by Congress forwarded by the Lula government will be guaranteed”, Randolfe pointed out in an interview with GloboNews in the morning.
